Colorado Gov. John Hickenlooper and his staff will spend this weekend trying to convince business and energy-industry leaders to accept a compromise plan giving more regulatory control over drilling to local governments.

Officials from the governor’s office said Friday that the plan represents the best chance to find consensus and avoid a multimillion-dollar ballot fight this year over constitutional proposals that business groups argue would cripple the energy industry in the state.

Hickenlooper aides said they feel good about their chances of getting a core group of natural-resources companies with significant operations in Colorado on board with the proposal — a standard that Hickenlooper would have to meet in order to call a special session to consider the bill.

But initial reaction from oil and gas executives is mixed on whether they'll back the proposal.

Paula Beasley, a spokeswoman for Noble Energy Inc. (NYSE: NBL) said Friday the company believes the proposal “is an acceptable compromise.”

“It requires setback efforts to balance with the recovery of oil and gas resources and with the interests of the community, the landowner, the property owner, the mineral rights owner — and the provisions of any surface use agreement,” Beasley said.

“It will also limit moratoriums to a reasonable time period to facilitate informed decision making,” she said.

Noble expects to invest about $12 billion into Colorado in the next several years, and is said to be one of two big oil and gas companies that have been involved in the negotiations over the compromise. Anadarko Petroleum Corp. (NYSE: APC) is said to be the other.

Beasley said Noble believes the proposal will get the support it needs and “is good for all of Colorado and will provide greater clarity moving forward.”

Chris Castilian, the manager of government and community relations at Anadarko in Denver, said Friday the company doesn’t necessarily like the latest proposal, but will work with it.

“On its own, we wouldn’t consider this a reasonable bill, but in light of the fact that we’re facing ballot proposals that are much more draconian in applicability without any opporutnity to debate or modify it, we’ll look at the legislation, hold our nose, and work with it,” Castilian said.

“A legislative solution has a better chance of succeeding than a ballot solution. This is a more thoughtful, productive way to address the issues,” he said.

But some oil and gas executives and political officials who have seen the newest version of the legislation said they will not back it.

“While the governor has made a valiant effort to bring parties together, this is not a draft we can support,” Encana Corp. (NYSE: ECA) said in a statement to the Denver Business Journal. “Our focus is now on supporting groups like Coloradans For Responsible Reform in opposing a potential ballot initiative that would be highly destructive to Colorado’s economy.”

Hickenlooper’s staffers have been negotiating for months with local companies on a bill to give cities and counties more say over details like noise regulations and mandatory setbacks.

The talks are aimed at heading off 11 proposed ballot measures — including nine that are backed by wealthy Democratic Congressman Jared Polis of Boulder — that could subject oil and gas operations to more extreme rules, such as 1,500-foot setbacks or bans on drilling within local jurisdictions.

After several rounds of meetings with stakeholders in recent weeks, three Hickenlooper staffers — who spoke on the condition that their names not be used — said Friday that they believe they have a bill draft for which they can begin building support from various business, agricultural and local-government organizations.

They refused to put a deadline on getting consensus approval but said they will work through the weekend and early next week in meeting with leaders of those communities because they feel they need to call a special session before Polis and his allies start putting forth the resources to collect signatures in order to put any measures on the ballot.

Asked about the proposal, Hickenlooper communications director Eric Brown said: “We’ve reached a place in negotiating local control issues related to oil and gas development where we are soliciting greater stakeholder input. We still need larger support – and particularly bipartisan support – before deciding whether to call a special session.”

Polis has agreed that if the new bill passes, he will withdraw financial support from any oil/gas regulatory ballot measures through 2018, the administration officials said. However, the bill would have to pass in the form it is now being offered, they added.

An updated proposal provided to the Denver Business Journal, which is similar to earlier drafts of the bill, would:

Allow local governments to create setbacks for oil and gas wells from occupied structures that exceed current setbacks in state law — 500 feet from homes and 1,000 feet from schools and hospitals — if an increased setback “reasonably balances the recovery of the oil and gas resource, the interests of the surrounding community and the interests of the surface and mineral estates, including the provisions of any applicable surface use agreement”;

Allow local governments to regulate noise associated with oil and gas development;

Let cities and counties conduct inspections to ensure compliance with local laws and charge a “reasonable and nondiscriminatory fee” to cover the costs of inspections and monitoring; and

Allow local governments to impose a moratorium covering oil and gas operations “that is reasonably necessary to facilitate informed decision-making and planning to regulate oil and gas operations” but requires that they can’t be “arbitrary or excessive.”

A Hickenlooper official said they chose to leave the language open-ended in order to facilitate deals between drillers and governments rather to be prescriptive about setbacks and moratoria.

“This seems to be the one. If there is a sweet spot, this is it,” one official said.

That opinion is not shared by a number of the companies that will be asked to agree on the bill, however.

An official with one company that was part of the recent stakeholder meetings said that major oil and gas drillers have significant concerns over a number of the provisions in the proposal, including the idea that it would create regulatory uncertainty, lead to unacceptable levels of setbacks, allow moratoriums without any specific parameters on them and require that state rules be harmonized with divergent local standards.

Chad Vorthmann, executive vice president of the Colorado Farm Bureau, said he told Hickenlooper that the agriculture organization’s initial read of the proposal is that it’s very vague.

“I told him it would be tough, off of this draft, to monitor or support this bill,” Vorthmann said, adding that the bureau is aware of deep divisions over the proposal — and the negotiations — that exist in the oil and gas industry.

Vorthmann said he also asked the governor where he’d stand if a bill on local control can’t gain the necessary support to pass through a special session.

“He told me, if nothing happens, he’ll stand with us in opposition to the ballot proposals,” Vorthmann said.

Stan Dempsey, the president of the Colorado Petroleum Association, said his organization appeciates the Hickenlooper’s work on the issue of local control, but on Friday expressed its opposition to the draft proposal to the governor’s office.

“We oppose the concepts in the bill, we don’t support local governments establishing their own setbacks, conducting inspections and charging for them when the state already does that,” Dempsey said.

“We think the bill has a lot of complexities and confusing elements to it,” he said.

Hickenlooper staffers said also that they hope to find bipartisan support for the bill before they call a special session, though they stopped short of saying they would not push the measure if bipartisanship remains elusive.

Rep. Jerry Sonnenberg, a Sterling Republican who has been involved with talks with Hickenlooper, said he has not seen any positive changes from early versions of the bill and does not believe any Republicans would support it.

In fact, Sonnenberg questioned whether the bill could pass the Democrat-controlled Senate, where several majority-party members have voted against increasing drilling regulations over the past two years.

“We have a governor who’s said we have the strongest, most environmentally friendly rules for oil and gas in the nation. And now he wants to call a special session to add more regulation,” said Sonnenberg, referring to industry-backed compromises Hickenlooper has backed on setback and to methane emissions in recent years. “I am opposed to taxpayer dollars paying for a special session to appease Jared Polis.”

House Majority Leader Dickey Lee Hullinghorst, a Gunbarrel Democrat who is working closely with Polis in the negotiations, said that she was pleased that officials have continued negotiations for so long and was optimistic that a deal could be reached.

If it is not, however, Polis and his allies likely will go toe-to-toe at the ballot with Coloradans for Responsible Reform, a group of business and civic leaders that formed in early May and said they are prepared to raise $10 million or more to fight the measures that they fear will be destructive to a business sector that represents about 12 percent of the state economy.

Earlier this week, Lem Smith, Encana’s Denver-based director of government and regulatory affairs, said that a group he chaired that was opposing just one of the proposed ballot initiatives had decided to shift its focus to working with CFRR to defeat all of the measures.

“This initiative and its companion proposals specifically banning the oil and gas industry would be devastating to our state,” Smith wrote.